J. G Kariuki t/a Gachiri Kariuki & Co. Advocates v Hannah Mandi Etiang [2022] KEHC 1030 (KLR)

REPUBLIC OF KENYA

IN THE HIGH COURT OF KENYA

AT MOMBASA

MISC. CIVIL APPLICATION NO.  124 OF 2019

J. G KARIUKI T/A GACHIRI KARIUKI & CO. ADVOCATES......APPLICANT/RESPONDENT

VERSUS

HANNAH MANDI ETIANG...................................................................RESPONDENT/APPLICANT

(Being a Reference from the Ruling and Orders of Hon. Nyariki, DR in respect of taxation

of Advocate/Client Bill of Costs dated 18th January 2019)

RULING

[1]    This is a reference filed by the respondent/applicant herein, Hannah Mandi Etiang(hereinafter,“the applicant), vide the Chamber Summons dated 7th May, 2021. It was filed pursuant to paragraph 11 (2) of the Advocates (Remuneration)in objection to the decision of the Hon. Nyariki, DR, (hereinafter, the Taxing Officer”) delivered herein on 24th September 2020. In particular, the applicant contends that:

[a]      The learned Taxing Officer erred in law and in fact in the manner in which he taxed items 1, 22, 29, 42, 52, 68 and 118 of the applicant’s Advocate/Client Bill of Costs dated 18th January, 2019; which amounts were unjustifiably higher than the applicable rates under the Advocates (Remuneration) Order.

[b]      The learned Taxing Officer erred in law in computing the amount allowed in the said Bill of Costs and thus gave a total amount which was much higher than the total costs allowed in the ruling delivered on the 24th September, 2020.

[c]      There were errors of principle in the Taxing Officer’s ruling and/or reasoning.

[d]      The learned Taxing Officer erred in failing to give any or any proper reason for taxing the said items 1, 22, 29, 42, 52, 68 and 118 of the applicant’s said Bill in the sums therein.

[e]      The learned Taxing Officer erred in failing to give reasons for the taxation contrary to the mandatory provisions of Paragraph 11(1) of the Advocates Remuneration Order.

[2]     Accordingly, the applicant prayed that the Court considers the ruling and the sums awarded; and subject the Advocate/Client Bill of Costs dated18th January 2019to a re-taxation; and that:

[a]the Taxing Officer’s decision in respect of items 1, 22, 29, 42, 52, 68 and 118 in the said Bill be set aside; and

[b]      the Court be pleased to re-assess the fees payable on the said items 1, 22, 29, 42, 52, 68 and 118 at such sums as the justice of this case would require bearing in mind the applicable scale; and based on the relevant Advocates Remuneration Order.

[c]      the Court be pleased to re-calculate the amount allowed in the Bill aforesaid and give the total thereof in consonance with the re-taxation.

[d]      the applicant be ordered to pay the costs of this Reference.

[3]    The Reference is therefore in respect of specific items; namely, Items 1, 22, 29, 42, 52, 68 and 118of the subject Bill of Costs dated 18th January, 2019;and therefore, pursuant to the directions given herein on21st September 2021,the reference was disposed of by way of written submissions. In his written submissions filed herein on 15th November 2021, Mr. Tindika for the applicant essentially argued that the impugned items were taxed at unjustifiably higher rates than is permissible under the Advocates (Remuneration) Order. Hence, counsel asserted that the taxing master erred in principle in taxing Item 1 in the sum of Kshs. 110,000/=; considering that the matter in question never proceeded for hearing. He accordingly suggested that Item 1 be reduced to Kshs. 77,000/=.

[4]    Mr. Tindika relied on the case of Akhtar Shahid Butt & Another v David Kinusu Sifuna t/a Sifuna & Company Advocates [2009] eKLR, wherein the Court of Appeal reduced instructions fees in respect of a matter which had not proceeded to hearing from Kshs. 860,000/= to Kshs. 150,000/=. Thus, counsel urged the Court to bear in mind the services rendered by the respondent to the applicant and the stage of the case in its re-taxation.

[5]    Mr. Tindika also took issue with the sums Kshs. 630/= each, awarded by the Taxing Officer for Items 22, 29, 42, 52 and 68. He pointed out that these items entailed drawing of one-page Hearing Notices; yet the Taxing Officer awarded a total sum of Kshs. 6, 510/=. He proposed that each of the said items be reduced to the scale fee of Kshs. 180/=,in line with Paragraph 4 (d) of Advocates (Remuneration) Order, 2006. In effect, the applicant prayed that an amount of Kshs. 5, 610/= be disallowed in respect of those particular items. The same argument was advanced in respect of Item 118; which the Taxing Officer allowed at Kshs. 555/=. The court was urged to tax off Kshs. 375/=from that Item and reduce it toKshs. 180/=only.

[6]Lastly, it was the contention of counsel for the applicant that the entire Bill as taxed has arithmetic errors. According to him, the total amount indicated in the ruling of Kshs. 350,435. 00/= before raising instruction fees by ½ adding VAT and disbursements is at variance with the taxed amounts as reflected in the said ruling; which add up to Kshs. 146, 702/= only. Thus, counsel for the applicant submitted that the entire ruling of the taxing master delivered on 24th September, 2020 is unjust and therefore ought to be aside. He also prayed that the taxed amounts be re-calculated in accord with the re-taxation.

[7]    On his part, Mr. Origi, learned counsel for the respondent, defended the decision of the Taxing Officer, contending that Item No. 1 was correctly taxed at Kshs. 110,000. 00/=, based on the value of the subject matter of Kshs. 3,200,000. 00/=, as evinced in the pleadings. Counsel urged the Court to note that the value of the subject matter is not in dispute; and had, in fact, been expressly admitted in the applicant’s written submissions. He relied on Joreth Limited v Kigano & Associates [2002] eKLR for the proposition that the value of the subject matter of a suit for the purposes of taxation of a Bill of Costs ought to be determined from the pleadings, judgment or settlement, as the case may be.

[8]    For Items no. 22, 29, 42, 52, 68 and 118, counsel for the respondent simply submitted that they were correctly taxed and should not be interfered with. He added that the Reference is nothing but a misguided attempt at setting aside a properly reasoned ruling on taxation; and should therefore be dismissed with costs.

[9]I have considered the written submissions filed herein by learned counsel for the parties.  It is trite that a Judge ought not to interfere with the discretion of a Taxing Officer on quantum merely because the amount awarded was high. It has to be demonstrated that the fee awarded was so manifestly excessive as to justify interference. Thus, in the case of First American Bank of Kenya v Shah & Others[2002] 1 EA 64, it was held thus:

"The High Court was not entitled to upset a taxation merely  because in its opinion, the amount awarded was high and it    would not interfere with a Taxing Officer's decision unless the  decision was based on an error of principle or the fee awarded was so manifestly excessive as to justify an interference that it was based on an error of principle (Steel Construction Petroleum Engineering (EA) Limited vs. Uganda Sugar Factory[1970] EA 141followed).Under the Advocates (Remuneration) Order, some of the relevant factors to be considered were the nature and importance of the matter, the amount or value of the subject matter involved, the interest of the parties, the general conduct of the proceedings and any direction by the    trial judge."

[10]  There is no gainsaying therefore that the taxing master has discretion to determine what is a reasonable charge for instructions fees; the only caveat being that the determination be guided by either the pleadings, the judgment and/or settlement. This was well explicated by the Court of Appeal in Joreth Limited v Kigano & AssociatesNRB CA Civil Appeal No. 66 of 1999 [2002] eKLR thus:

“We would at this stage, point out that the value of the subject matter of a suit for the purposes of taxation of a bill of costs ought to be determined from the pleadings, judgment or settlement (if such be the case) but if the same is not ascertainable the taxing officer is entitled to use his discretion to assess Instruction fee as he considers just, taking into account, amongst other matters, the nature and importance of the cause or matter, the interest of the parties, the general conduct of the proceedings, and direction by the trial judge and all other relevant circumstances.”

[11]  In this case, it is not in dispute that the applicable scale is as per the Advocates (Remuneration) Order, 2006; granted that the parent suit, namely Mombasa High Court Civil Suit No. 259 of 2007 was filed in 2007. It is also common ground that the value of the subject matter is Kshs. 3,200,000. 00/=, as conceded by both parties in their written submissions. The Advocates (Remuneration) Order, 2006, Schedule VI paragraph 1 (b) provides: -

(b) To sue in any proceedings described in paragraph (a) where a defence or other denial of liability is filed; or to have an issue determined arising out of inter-pleader or other proceedings before or after suit; or to present or oppose an appeal where the value of the subject matter can be determined from the pleadings, judgement or settlement between the parties and –

That value exceeds But does not exceed

Sh. Sh. Shs.

- 500,000 49,000

500,000 750,000 63,000

750,000 1,000,000 77,000

1,000,000 20,000,000 fees as for Sh.1,000,000 plus an additional cent. 1,000,000 plus an additional 1. 5 per cent

Over 20,000,000 Fees as for 20,000,000 plus an additional 1. 25 per cent

[12]  It is plain therefore that Taxing Officer’s computation of Item 1, in the sum of Kshs. 110,000. 00/= is accurate. Moreover, it is apparent from the submissions of Mr. Tindika that he did not disagree with the computation. His argument was that the aforesaid sum is not commensurate with the work done as the case never proceeded to trial. He consequently proposed that Item 1 be reduced to Kshs. 33,000/= only, on the authority of Akhtar Shahid Butt & Another v David Kinusu Sifuna t/a Sifuna & Co. Advocates (supra); in which the Court of Appeal held that:

“We are of the view that the instruction fee awarded to the respondent was manifestly excessive, unjust and completely out of proportion to the work carried out by them. The taxing officer failed to correctly apply the principles set out in Joreth v Kigano (2002) EALR 93 and the learned judge was in error in not setting aside the award.

Accordingly, and for reasons stated, we allow this appeal, set aside the order and decree of the superior court dated 15th April, 2004 endorsing the decree and order of the taxing officer in respect of the instruction fees and substitute the same with an award of Kshs. 150,000/= for instruction fee...”

[13]It is noteworthy however that in Joreth Ltd (supra), the Court of Appeal expressed the view that:

“…We come now to the Notice of Grounds for affirming the decision of the learned judge. By the first ground thereof the respondent states that Instruction Fee is an independent and static item, is charged once only and is not affected or determined by the stage the suit has reached. In principle that is correct. There is nothing however to suggest in the ruling of C.K. Njai, Esq., that he had considered the Instruction Fee on the stage the suit had reached. It was the learned judge who so considered the matter. The learned judge was clearly wrong in saying that one-half the work done qualifies for one-half Instruction Fee.”

[14]  The same position was taken in Okoth & Kiplangat Advocates v Board of Trustees National Social Security Fund [2007] eKLRby Hon. Warsame J,(as he then was) thus:

“….I reckon that instruction fees is an independent and static item chargeable once and is not effected or determined by the stage the suit has reached.  The progress of a matter and the steps undertaken is not a factor in computing instructions fees provided it is shown that the Advocates had been instructed to undertake a brief.  And by virtue of the said instructions, he took certain steps in fulfillment of the instructions of the client.  It is essential to show, that the Advocate had been instructed and pursuant to that instructions, he undertook some steps in ensuring the instructions is reduced into pleadings.  It is enough to show and/or put the cause of action or defence before court to be entitled to instructions fees….”

[15]  In subscribe to the same school of thought and hold the view that an Advocate earns his/her fee from the moment they are instructed; and that it matters not whether the matter proceeded to trial. I am consequently not persuaded that instruction fees should be reduced based on the reason that the suit never proceeded to trial. Moreover, I am not persuaded that Kshs. 110,000/= is so excessive in the circumstances as to warrant reduction.

[16]  On items No. 22, 29, 42, 52, and 68, I note that they were taxed at Kshs. 630/= and not Kshs. 6,510/= as submitted by counsel for the applicant. Similarly, Item No. 118 was taxed at the scale fee of Kshs. 180/= and not Kshs. 555/= as alleged by counsel. The amounts complained of, namely Kshs. 6,510/= and Kshs. 555/=, respectively, were taxed off and this was clearly indicated in the “Taxed Off” column in the Taxing Officer’s ruling dated 24th September, 2020.

[17]  That said, the only valid complaint is that the said Ruling on Taxation has arithmetical errors. In this regard, counsel for the applicant presented a computation that accords with the taxation of the taxing officer at paragraphs 6, 7 and 8 of his written submissions dated 8th November 2021;and having scrutinized the Bill of Costs as well as the computation set out at pages 2, 3 and 4 of the impugned ruling, I am convinced that, indeed, the Taxing Officer’s computation is erroneous. The taxing master in his Ruling has taxed the Bill of Costs at Kshs. 527, 081. 90/= but has not shown how he arrived at the sub-total of Kshs. 350, 435. 00/=. On the other hand, the proposal by counsel for the applicant appears to have ignored a large number of the items enumerated in the Bill; which were evidently allowed as presented. I note that he confined himself to the Items listed here below:

Amount taxed                                Kshs. 145,042. 00

Increase by half                           Kshs. 72,521. 00

Subtotal                                          Kshs. 217,563. 00

Add 16% VAT on 217,563. 00       Kshs. 34,810. 00

Add disbursements                     Kshs. 2,325. 00

Subtotal                                          Kshs. 254,698. 10

Less amount paid by client        Kshs. 85,000. 00

Balance due                                   Kshs. 169,698. 10

[18]  While this is an error that ought to have been corrected by way of review or under the Slip Rule as provided for in Sections 80 and 90 of the Civil Procedure Act and therefore would, ordinarily not have necessitated a re-taxation, it is not altogether clear why some of the disbursement items were excluded by the Taxing Officer. As it is, the disbursements as reflected in the Bill are in excess of the amount of Kshs. 2,325/= that appears at page 4 of the ruling.

[19]  In the premises, a case has been made for a re-computation of the Advocate/Client Bill of Costs dated 18th January, 2019. The reference is hereby allowed and it is accordingly ordered that the said Bill be placed before a Taxing Officer other than Hon. Nyariki for recalculation in line with the findings of the Court herein.

It is so ordered.

DATED SIGNED AND DELIVERED VIRTUALLY AT MOMBASA THIS 17TH DAY OF MARCH 2022.

___________

OLGA SEWE

JUDGE